U.S. House to vote on extending all Bush-era tax cuts

WASHINGTON Wed Aug 1, 2012 2:34pm EDT

A woman walks past the U.S. Capitol dome, seen through a porthole in nearby brick-work, in Washington, August 2, 2011. REUTERS/Jonathan Ernst

A woman walks past the U.S. Capitol dome, seen through a porthole in nearby brick-work, in Washington, August 2, 2011.

Credit: Reuters/Jonathan Ernst

Related Topics

WASHINGTON (Reuters) - The Republican-controlled U.S. House of Representatives is expected on Wednesday to pass a largely symbolic plan to extend all tax cuts, leaving a deep rift over tax policy unresolved until after November's elections.

The Republican measure extends all current low individual tax rates that are set to lapse at the year-end, a counterpoint to a rival Democratic bill passed by the Senate last week that would raise tax rates on the wealthy.

The dueling votes highlight a bitter partisan divide ahead of the elections, with each vote becoming instant grist for competing campaign ads, pronouncements by the Republican and Democratic campaign committees and political talk shows.

"This election is about jobs and the economy," said Republican House Majority Leader Eric Cantor. "The choice is clear. Either you want growth or you want more taxes."

Democrats see the issue differently. House Minority Whip Steny Hoyer blasted Republicans for wasting time by not coming together to extend tax cuts for middle-class Americans - a move he said both sides agree on.

Where Congress disagrees is tax rates for the wealthy. The Senate bill would extend current rates on income up to $250,000 and restore higher rates on income above that level.

"If we don't ask folks at the very high end to pay a little bit more to contribute to (cutting) the deficit, it means everybody else gets whacked that much harder," Democratic Representative Chris Van Hollen told CNN on Tuesday.

"It means seniors on Medicare have to end up paying more. It means we cut our kids' education and investments in important infrastructure, and other areas that are important to the economy," he said, summing up how the tax dispute will play in Democratic campaign ads.

At issue are the tax cuts enacted under former president George W. Bush in 2001 and 2003, which are due to snap back to their prior levels at the end of the year.

The rates are a key part of the "fiscal cliff" that is likely to confront Congress after the election, when the tax cuts expire just as $109 billion in automatic spending cuts start to take effect unless Congress acts.

Economists say that failure by Congress to act on these looming threats could crush a weak economic recovery and start a new recession.

Congress will have little time for substantive action before the November 6 presidential and congressional elections. At the end of this week, lawmakers depart for a five-week recess.

When they return, they will be in session for only three weeks before the November 6 election and must pass a stop-gap funding measure to avoid a government shutdown after the September 30 end of the fiscal year.

(Reporting By Kim Dixon and Richard Cowan; writing by David Lawder; editing by Fred Barbash and Andre Grenon)

FILED UNDER:
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article